Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>While approximately 80% of pair trades play out according to plan, a small subset of trades fails to produce a trade close signal within the expected timeframe.</li>
<li>This Insight investigates the phenomenon of parameter drift and how to manage its adverse effects.</li>
<li>Analyzing challenging trades provides valuable insights into model behavior, enhancing both risk management and preparedness for future market shifts.</li>
</ul>


While approximately 80% of pair trades play out according to plan, a small subset of trades fails to produce a trade close signal within the expected timeframe.
This Insight investigates the phenomenon of parameter drift and how to manage its adverse effects.
Analyzing challenging trades provides valuable insights into model behavior, enhancing both risk management and preparedness for future market shifts.


When the Model Chases the Price: Lessons from Two Long-Running Pair Trades

External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

Key points (machine generated)<ul><li>Tencent has 1.4 billion users on Weixin/WeChat, establishing it as a leading digital platform.</li><li>The company is positioned to enhance monetization through AI integration across its services.</li><li>Despite its strengths, Tencent's core business is undervalued, trading at 14 times the consensus 2026 earnings per share.</li></ul>This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points (machine generated)Tencent has 1.4 billion users on Weixin/WeChat, establishing it as a leading digital platform.The company is positioned to enhance monetization through AI integration across its services.Despite its strengths, Tencent's core business is undervalued, trading at 14 times the consensus 2026 earnings per share.This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Tencent Holdings Ltd (TCTZF) - Friday, Jul 25, 2025

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>China announced game approval for the October batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening.</li>
<li>Of the companies that we are monitoring, none got approval.</li>
</ul>


China announced game approval for the October batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
Of the companies that we are monitoring, none got approval.


Tencent/Netease: Zero for Big Names Despite Optimism in October

Equity Derivatives

<ul>
<li>
Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich. This Insight provides volatility analysis for 8 prominent Hong Kong stocks and the benchmark index.</li>
<li>
Highlights: In contrast, Alibaba’s IV remains rich, while Hang Seng Index IV is cheap across the curve, offering attractive hedge entry points.</li>
<li>
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.</li>
</ul>



Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich. This Insight provides volatility analysis for 8 prominent Hong Kong stocks and the benchmark index.

Highlights: In contrast, Alibaba’s IV remains rich, while Hang Seng Index IV is cheap across the curve, offering attractive hedge entry points.

Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.


Cheap Vs. Rich Volatility: Diverging Signals Across Alibaba (9988 HK), Tencent (700 HK) & The HSI

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

<ul>
<li>China's service sector is growing faster than manufacturing and construction, especially the business-to-business services, like IT Services, cloud services leasing and other business services.</li>
<li>Among merchandize retail sectors, household and communication appliances, sports and recreational goods and gold and silver jewelry are growing the fastest. Some segments of food are enjoying healthy growth too.</li>
<li>From a universe of 35 stocks in these sectors, we screen our favored 10, based on valuations more than justified by forecast earnings growth, high ROE and consensus Buy rating. </li>
</ul>


China's service sector is growing faster than manufacturing and construction, especially the business-to-business services, like IT Services, cloud services leasing and other business services.
Among merchandize retail sectors, household and communication appliances, sports and recreational goods and gold and silver jewelry are growing the fastest. Some segments of food are enjoying healthy growth too.
From a universe of 35 stocks in these sectors, we screen our favored 10, based on valuations more than justified by forecast earnings growth, high ROE and consensus Buy rating. 


How to Play the Chinese Domestic Economic Drivers

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

When the Model Chases the Price: Lessons from Two Long-Running Pair Trades

A live example featuring Tencent shows how persistent price moves can cause parameter drift. The case study focuses on mitigation strategies and...

Gaudenz Schneider

Tencent Holdings Ltd (TCTZF) - Friday, Jul 25, 2025

The Tencent Investment Memo highlights its 1.4 billion Weixin/WeChat users and argues the market undervalues its AI-driven monetization potential...

Value Investors Club (VIC)

Tencent/Netease: Zero for Big Names Despite Optimism in October

China approves October batch of games at a higher level than 2023, with accelerated pace resembling pre-tightening, but none of the monitored...

Ke Yan, CFA, FRM

Cheap Vs. Rich Volatility: Diverging Signals Across Alibaba (9988 HK), Tencent (700 HK) & The HSI

Volatility cones reveal contrasting signals — Alibaba’s IV stays rich, Tencent trades nearly cheap, and the Hang Seng Index shows low IV,...

Gaudenz Schneider

How to Play the Chinese Domestic Economic Drivers

As we wrote in Feb-25 (Asian Equities: It's China's Year: Our China Twelve in the Year of the Snake), 2025 is indeed turning out China's year. Of...

Manishi Raychaudhuri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

When the Model Chases the Price: Lessons from Two Long-Running Pair Trades

A live example featuring Tencent shows how persistent price moves can cause parameter drift. The case study focuses on mitigation strategies and...

Gaudenz Schneider

Tencent Holdings Ltd (TCTZF) - Friday, Jul 25, 2025

The Tencent Investment Memo highlights its 1.4 billion Weixin/WeChat users and argues the market undervalues its AI-driven monetization potential...

Value Investors Club (VIC)

Tencent/Netease: Zero for Big Names Despite Optimism in October

​China approves October batch of games at a higher level than 2023, with accelerated pace resembling pre-tightening, but none of the monitored...

Ke Yan, CFA, FRM

Cheap Vs. Rich Volatility: Diverging Signals Across Alibaba (9988 HK), Tencent (700 HK) & The HSI

Volatility cones reveal contrasting signals — Alibaba’s IV stays rich, Tencent trades nearly cheap, and the Hang Seng Index shows low IV,...

Gaudenz Schneider

How to Play the Chinese Domestic Economic Drivers

As we wrote in Feb-25 (Asian Equities: It's China's Year: Our China Twelve in the Year of the Snake), 2025 is indeed turning out China's year. Of...

Manishi Raychaudhuri

China approves October batch of games at a higher level than 2023, with accelerated pace resembling pre-tightening, but none of the monitored...